WHITE FISH AND HERRING SUBSIDIES

HC Deb 25 March 1969 vol 780 cc1211-37

10.0 a.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy)

I beg to move, That the White Fish and Herring Subsidies (United Kingdom) (Amendment) Scheme 1969, dated 17th February 1969, a copy of which was laid before this House on 25th February, be approved. Mr. Speaker, perhaps it will be for the convenience of the House if with this Scheme we discuss the second Scheme, That the White Fish Subsidy (Deep Sea Vessels) (United Kingdom) Scheme 1969, dated 17th February 1969, a copy of which was laid before this House on 25th February, be approved.

Mr. Speaker

I have no objection, if the House has none. So be it.

Mr. Hoy

Hon. Members will recall that in July last year my right hon. Friend gave to the House details of the new deep sea subsidy arrangements. He said that the necessary legislation would be introduced during this Session. That Bill was duly introduced, and completed its passage through Parliament in December.

The extended powers under the Sea Fisheries Act, 1968, have to be implemented by Order, and during the Second Reading debate I said that as soon as possible after Royal Assent had been given the Government would lay before Parliament a new subsidy scheme.

The preparation of this rather complicated Scheme and the discussions with the industry and the representatives of the unions over the details took a little longer than we expected, but these were satisfactorily completed and the Scheme was laid before Parliament on 25th February. I am very glad to be now inviting the House to give its approval.

I do not think I need take up too much of the time of the House with this well-debated subject. The working arrangements now set out in the Scheme were fully explained during the Second Reading and hon. Members opposite took advantage of the opportunity to seek a full explanation of the proposals. In particular, the calculation of the subsidy and its distribution on a basis of efficiency were discussed at length.

The Scheme will operate for three years until the 31st July, 1971. In 1970 we shall review its effectiveness and then decide whether any changes are needed for the last two years of the five-year guarantee period given by the Government.

Perhaps I should briefly remind the House of the two basic factors in the new subsidy. First, the total amount of subsidy will be related to the operating profits of all deep sea vessels of 80 feet and over. Secondly, this total amount will be distributed between the 534 vessels in England and Wales and Scotland in proportion to the added value contributed by each vessel.

These are entirely new concepts in administering Government support and are the vital parts of the Scheme. Members will find the necessary provision set out in paragraphs 9 and 10.

On this first occasion the subsidy period is for six months. This is to enable the industry to benefit as soon as possible, and the total amount due under the new formula for six months is £1,669,000. However, as my right hon. Friend promised last July, we have continued the daily rate subsidy payments under the 1968 Scheme—and we shall continue to do so until 31st July this year—but these have been regarded as payments on account to the industry and the total daily payments in the five months August to December, 1968, which amounted to £481,000, have been deducted in making the necessary calculations. The daily payments for January to July this year will be offset in future calculations. The net payment on this occasion will be £1,188,000.

Obviously the industry is most anxious to receive this urgent reinforcement to its cash flow and as soon as this Scheme is approved the payments will be made.

Before I leave this Scheme I think I should remind the House that these subsidy arrangements are the beginning of a new venture for the fishing industry—indeed, new in any similar field also—a form of support related directly to the operating efficiency of the men who provide and operate and work the ships. We are encouraging efficiency and economic operation.

I am glad to say that current fishing results are better than those of the very desperate period throughout most of 1968. Although fishing must always face ups and downs, we hope that the new form of support will enable the deep sea fleet to withstand such fluctuations, and we look forward to a more stable and profitable industry as a result.

Perhaps I ought to say a few words about the Report of the Select Committee on Statutory Instruments. This Select Committee has, quite rightly, drawn up a note to the effect that there appears to be a defect in the Scheme. I think I ought to explain why this has come about. The Select Committee has reported that the Deep Sea Vessels Scheme should be drawn to the special attention of the House on the ground that its drafting appears to be defective in paragraph 9(3). The sub-paragraph deals with the arrangements for reducing the total grant payable under the 1969 Scheme by payments made under the 1968 Scheme. The words which the Select Committee suggests may be defective are these: the total amount of grant made available in respect of that subsidy period shall be the sum calculated in accordance with subparagraph (1) or, as the case may be, subparagraph (2), of this paragraph reduced by such amount in respect of the 1968 Scheme grants as the Minister may determine". The House was told before it approved the 1968 Scheme in July that the sums payable under that Scheme would be set against the total sum payable under the new 1969 Scheme. The words which I have read out were intended to do no more than enable the Ministers to deduct from the total sum payable under the 1969 Scheme all payments made under the 1968 Scheme up to as recent a date as possible. But those words can be construed as giving the Ministers an absolute discretion as to whether to make any deductions. It is this to which the Select Committee has drawn attention.

The House can be assured that it was not intended to confer such a discretion on the Ministers and they have no wish or intention to exercise it. They will in due course deduct from the total sums payable under the 1969 Scheme every penny paid under the 1968 Scheme, and they will have no alternative within the limits of the voted money. Paragraph 9(3) in fact will no longer have effect once the 1968 Scheme payments have been made and set off against the 1969 Scheme. I thought that it was as well to say this quite clearly to the House.

I will now turn to the Amendment Scheme. This change is necessary to implement a minor alteration to the arrangements for paying subsidies under the current 1968 Scheme. It will, until 31st July next, affect both the deep sea and inshore fleets, but after that date only the inshore vessels will be concerned, since the deep sea vessels will be operating entirely under the new subsidy Scheme.

It has been the practice to exclude from subsidy certain kinds of fish not normally sold for human consumption. Originally such landings were negligible, but more recently the demand for fish meal has meant that some fishermen have found it worth while to catch these kinds of fish, such as sand eels and Norway pout.

With the great increase in the demand for fish meal for feedingstuffs and also as a contribution to import saving we should not lose any opportunity of encouraging these landings as we already do for sprats and herring. The amendment will, therefore, make the necessary changes in the wording of the current Scheme so that these landings will not be excluded from subsidy.

I ask the House to give approval to these two Schemes.

Mr. Speaker

Order. I would remind the House that quite a number of fishermen want to take part in the debate. Reasonably brief speeches will help.

10.10 a.m.

Mr. Patrick Wall (Haltemprice)

As the Minister said, the Scheme implements the Sea Fisheries Act, 1968, which we debated at some length last November. Therefore, I think that it will be quite easy for us to keep our speeches very short.

The two main features of the Scheme are that it provides for an increase in subsidies to the deep water fleet from about £1.4 million under the old Scheme to a maximum of £4 million and bases the method of assessment of subsidies on efficiency, which is a new and wholly admirable concept.

I think that I speak for both sides of the House and the industry when I say that we regret the need for subsidies. It is as well to bear in mind that the causes are largely out of the control of the House or the fishing industry: the loss of traditional fishing grounds; very heavily subsidised foreign competition; the higher costs of ships and crews; and what amounts to a ban on British fish landings in Europe while there is virtually an open market in this country for European fish and fish products. For these reasons we accept the need for subsidies and welcome the Scheme.

As the Minister said, most of 1968 was a very bad period. Nearly every distant water vessel lost money. Catches were unsold and went to fishmeal; the amount of fishmeal produced increased enormously. This led to a shrinkage of the fleet. Since last autumn matters have improved. In the first six-month period of the new Scheme £1.2 million will be paid to 534 vessels, plus nearly £500,000 under the old Scheme. This will be of great value to the industry.

Moreover, a better picture is emerging. The end of the winter and the spring have produced better fishing. I am informed that when the second subsidy distribution is paid in August it is likely to be very much lower because the gross profits for the period ending 31st March are likely to be very much higher. At this time the industry's earnings are likely to be now, but obviously the industry cannot expect to have it both ways.

Although I have said that the picture has been improving this spring, I am also told by the experts that the outlook for the summer is not good. I am told, for example, that the U.S. market for frozen fish remains poor, that the Canadian industry is in a very poor shape and has to have considerable Government assistance, and that frozen fish stocks in Europe remain high, which has a very depressing effect on the market in this country. Should the minimum price scheme maintained by the British Trawlers' Federation collapse, the industry would be in a very dangerous position. I remind the Minister of the following statement by the B.T.F. in January: … the increases in minima are quite inadequate to the industry's needs but we have bound ourselves, with the approval of the Restrictive Practices Court, to observe ' ceilings ' above which the minimum prices of the four principal varieties cannot be raised…besides the individual price ceilings, we have shouldered the obligation of assuring that the minimum prices are at least 30 per cent. below the average costs of production of the preceding three years. This is a severe restriction at the best of times but particularly in a period of cost inflation. There is a need for further consideration of a statutory minimum price scheme, and above all for a careful study of imports, together with some form of regulation by quotas, levies, or minimum import prices—to quote the recommendation of the Select Committee.

On the question of import control, the Government made a move last December when we debated the Imports Duties (General) No. 11 Order, which imposed 10 per cent. duties on frozen fillets from the E.F.T.A. countries. I shall not develop this point, but I should like to ask the Minister what happened at the meeting which I understood took place on 18th and 19th March to discuss the annexe to the Stockholm Agreement. Did it end in agreement or disagreement? Can he also say whether the duty has made a difference to those imports in the three months that we have had it? How much has it reduced the excess over the 24,000 tons? What is our information on the effect on foreign subsidies? The Minister will recall that we were rather worried that if we put on the 10 per cent. tariff it would merely lead other Governments, such as the Norwegian, to put up their subsidies to cover it and would not stop the flood of imports into this country. This question is relevant to the order because the more we import the more subsidies the taxpayer will have to pay to our own industry.

The other action taken by the Government, which is also relevant, is on the question of the rationalisation of the deep water fleet, and I hope that the Minister will also be able to give us some information on that. The I.R.C. has talked with Ross, Associated Fisheries and Boston Deep Sea Fisheries, and we learned from the Press that Boston had withdrawn. I understand that it did so in perfectly good faith, because it is a private company and felt it difficult to meet the requirements of the two public companies.

Mr. Speaker

Order. I know the hon. Gentleman's expertise and his keenness on this subject, but he must not widen the debate too much.

Mr. Wall

Perhaps I could just say, Mr. Speaker, that I understand that there is no ill feeling on either side about this withdrawal. Perhaps it would be right to ask the Minister whether he can give us any information, because the rationalisation of the industry will affect the amount of subsidies the taxpayer has to pay and the House has to vote to support the industry. It is a difficult question for the Minister, but there have been so many statements by various members of the Corporation and articles in the Press that some information would be helpful to the House.

Finally, what do the Government intend to do about future debates in the House? In the past we had to debate the subsidies Scheme every year and the special subsidy every six months, so we had at least one full and one half-day debate on fisheries each year. The Minister said, in opening, that the Scheme will be reviewed in 1970, and presumably that will give us a chance to debate fisheries next year. Could he deal with this point, which was also raised in our last debate in November?

I now turn to the other Scheme, which allows subsidies to be paid for fish that are inedible but are caught for fishmeal. That is also right, because we are producing only 80,000 tons of our own fishmeal and we import 500,000 tons, worth some £30 million. It is obvious that we should encourage industrial fishing as far as we can. I am sure that the hon. Gentleman is with me when I say that there must be certain safeguards. There have been all kinds of accusations of foreign vessels dredging everything out of the sea—edible fish and almost everything else. That is very bad for conservation. I understand that minimum net sizes now apply, but that vessels can now take 10 per cent. of edible immature fish in addition to inedible fish solely used for fishmeal or industrial fishing. Could the hon. Gentleman deal with the question of safeguards from the point of view of conservation?

I have heeded your warning, Mr. Speaker, and have kept my speech as short as possible. I conclude by saying that the Opposition welcome the Order but repeat, as they said last November, that they very much hope that the Government will make serious investigations into some form of control of imports. We are not dogmatic as to how this should be done, but I believe that there should be very careful investigation. It is done in the E.E.C., and it is the Government's policy to join the E.E.C. That strengthens the case for serious investigation of all fish imports into this country at a time when our exports to Europe are severely limited.

10.20 a.m.

Mr. James Johnson (Kingston upon Hull, West)

Twelve months ago there was an air of deep pessimism in this House and in the industry. My constituents, amongst them Lilian Bilocca, came to see the Minister. Today the atmosphere has changed and is very much better. I compliment the Government and the Minister, for this subsidy increase is a very good thing for our fishermen. This Government have passed many safety measures for them and will pass more, and this financial measure is another welcome improvement.

The hon. Member for Haltemprice (Mr. Wall) was a little gloomy. I would not say that he was a Cassandra, but he did cast doubts upon certain aspects of the industry. The arrangements embodied in these Schemes have been discussed by the industry. We often talk about that word "participation". Here we have consulted all interests, both unions and owners. We need not talk much about the technicalities of the Schemes, because I believe that they will be accepted with alacrity by the industry.

Mr. Wall

I said that we welcomed the Scheme. It is a good thing for the industry; it is giving it a considerable amount of money. However, the more one can cut subsidies, the better. Investigations into import control might do just that.

Mr. Johnson

We all accept that, in the best of all possible worlds, we might do without subsidies, but, as the hon. Gentleman said, there is competition from E.F.T.A. fleets, dumping of frozen fish fillets, and so on. There are many kinds of activities for which we cannot legislate, let alone meet with competition.

The calculation of the subsidies goes back to 1st August. Having received almost £500,000 under the 1968 arrangements, the owners are now eagerly awaiting something like an additional £1,250,000 of public money. We are glad that we have had six months of good fishing, but we should note that even in Hull, at 10th March, there were 410 fishermen unemployed; so the situation is not all that rosy.

Article 10(6) of the Deep Sea Vessels Scheme gives a most satisfying payment basis. The words "added value" are mystical to some, but to others almost magical. We do not now include wages or food in calculating this sum. To do so would lead many of us to fear that it might affect wage bargaining, or that the rations of the deck-hands could be affected. The Amendment Scheme is welcome too.

It has often been asked why it is that the E.F.T.A. fleets can go in for industrial fishing and make money from it while we have not been able to do so. We import something like £30 million of fishmeal. This is a very great deal. We are subsidising farmers, and it would be equally helpful to our balance of payments deficit if we similarly helped this industrial fishing; because, after all, many of us on these benches think that it is a better food than the beef which is advocated on the benches opposite. I believe, like Mr. Basil Parks, leader of the deep sea fleet, that industrial fishing could be a good thing.

The Department has devised the best possible system of subsidies. These subsidies would naturally have been greater if we had not had such a good season. Naturally we would prefer good seasons to giving high subsidies. Nevertheless, such subsidies are only justified if we have efficient vessels and efficient methods of catching the fish. The new "added value" system will weed out inefficient vessels, and the oil burners will go. The Government and the I.R.C. have galvanised the industry and the B.T.F. Perhaps it will now change its initials to the B.T.C.—the British Trawling Corporation. The Hull Daily Mail on 17th March was optimistic about the coming merger, although I accept that Boston Deep Sea is not coming in—

Mr. Speaker

Order. The hon. Gentleman is descending the slippery slope. He must return to the Scheme.

Mr. Johnson

What we want to know is whether a decision is to be made soon about this matter. The industry is now given maximum incentive to succeed, but looking back at the good and bad times, we have to realise that we are approaching our last chance. When I came to Hull seven years ago, the Jeremiahs were prophesying that there was no long-term future in fishing. I do not believe this, and I am sure that this Measure will give us a much better future. We have to face severe overseas competition, but if we do not take this chance of building up a viable and competitive deep sea fleet, we shall be forced to turn our minds to some form of public ownership.

10.30 a.m.

Mr. Alasdair Mackenzie (Ross and Cromarty)

I welcome these Schemes and am glad to note that the prospects for the fishing industry are better this year than they were last. The Amendment Scheme is a major change in that the subsidies are to be paid for fish not intended for human consumption. It has been pointed out to me that this might be a retrograde step in that it might have a bad effect on fish conservation in trawling up immature fish. Perhaps the Minister would comment on this. If this were to happen on a large scale, it would undoubtedly have a bad effect. With such a large proportion of the world's population suffering from lack of protein, we should concentrate chiefly on fish for human consumption.

Some people argue that it would be more beneficial to the fishing industry if more money were spent on protecting fishing grounds from foreign trawlers and thus protecting the interests of the fishermen.

There is a great and growing demand for fishmeal, and this Order gives an opportunity for import saving. As we are subsidising fish which is not fit for human consumption, we must bear in mind the importance of the conservation of fish for the future.

10.31 a.m.

Mr. John Ellis (Bristol, North-West)

I intend no disrespect to the House by not staying to the end of the debate, but I have to attend a Committee upstairs at 11 o'clock.

I have received representations from the Transport and General Workers' Union to whom I am indebted for bringing some of these points to my attention. Paragraph 10 (a) and (b) of the Deep Sea Vessels Scheme specifies the costs which are allowed in working out the subsidy. I am pleased to see that the manning of the vessels is allowed for. This should prove to be beneficial, and will discourage attempts at saving on the crew.

Will the Minister say whether protective clothing is included in the costs that are allowed? Among the other approved safety measures, will such things as stern conversion, de-icing, improved wireless communication and stabilisation equipment be allowed for?

I am pleased to see that the cost of experimental trips is allowable. Ventures of this sort should be encouraged, to find out where are the best grounds. The trips may not be economic, and such trips as can be isolated should be allowable. Similarly, schemes such as fleeting and boxing schemes should be encouraged.

One very heavy item in the cost of operating a ship, especially a new and complicated ship, is the depreciation rate. Everyone in the industry wants to see the most modern ships brought into operation. Very often a great deal of the cost of older ships will already have been written down. Some encouragement should be given to the owners to provide the newest ships possible—

Mr. Speaker

Order. This looks like another subsidy under another Order.

Mr. Ellis

I accept that, Mr. Speaker. Perhaps the Minister will clarify whether the points I have raised are included in the allowable costs.

The determination of profits is important, especially to the Transport and General Workers' Union, which seeks to improve the conditions of its members who serve on ships. It is important for the union when it is pressing for improvements to know what profits are being made. I understand that some of these figures are confidential. All hon. Members who have spoken have said that it is right and proper that subsidies should be given to the industry, as the Scheme seeks to do, and, if the community as a whole is minded to give subsidies, the community should know what profits are being made in the industry, and I hope the Minister will bear that in mind.

10.35 a.m.

Mr. W. H. K. Baker (Banff)

I will address my remarks exclusively to the White Fish and Herring Subsidies (United Kingdom) (Amendment) Scheme. I will follow your suggestion, Mr. Speaker, that speeches be kept short by dealing only with that Scheme and also because I wish to make a contribution in the Scottish Grand Committee.

I would like to be able to say that I give this Scheme an unqualified welcome. It almost has my wholehearted support, but there is a small reservation which I will make later.

While it is true that quality fish will always find a market, it is also true that the inshore fleet, together with the distant water fleet, needs more encouragement. To illustrate this, during last summer for over six weeks two boats were laid up in one port in my constituency purely for lack of crew. That must reflect on profitability as seen by the younger members of the community who might otherwise have gone to sea in fishing vessels. One of the most important results of the Scheme will be more industrial fishing, and I welcome that.

I would have thought that the best method of conserving the immature fish would be to make sure that the minimum mesh size is strictly adhered to. This affects not only our own vessels but foreign vessels. Our own vessels resent the interference which may take place if this is too strictly enforced. Will the Minister make representations to those vessels which protect our own fishing vessels that the minimum net size is strictly enforced within waters over which we have jurisdiction? But for the fact that I am a little worried about conservation, I would have given this Scheme my unqualified support.

10.38 a.m.

Mr. J. L. M. Prior (Lowestoft)

I apologise for arriving late for the debate, but I wish to make only a short contribution. I congratulate the Government on introducing the Amendment to the Scheme which brings industrial fishing within the ambit of the subsidy. This is of considerable importance and is right up to date with the information that is now coming forward. The Scheme will receive great support from the fishing industry and from hon. Members who are interested in fishing. It must not be considered much more than an interim breathing space in trying to get the industry on to a sound footing.

The tragedy of all our fishing debates over the last 10 years, or even longer, is that we have always said, as each new scheme has come forward, that we hope that we shall get the fishing industry on to a sound financial basis, and each time we have had to adopt other measures to do so. I regard this as being the most efficient and most suitable subsidy arrangement so far devised, but I do not think that by a long way it will be the end of the story. I still believe that the Government must work out a long-term solution, and they will have to decide in advance what percentage or proportion of the total catch is to be supplied by home producers. It will be that proportion which will give the industry the confidence to go in for the replacement of vessels, and so on.

I have never believed that catching is the main problem of the industry. I think that we have as efficient a catching industry as any in the world. What we have to do now is not only go ahead with this Scheme and hope that it will help the catching side of the industry, but also concentrate on getting the distribution side right.

I would add one note of warning. Although we have had a good winter in the fishing industry, the signs of the last few days are that we may be getting back into the same sort of position as that from which we suffered last summer and the summer before. One of the difficulties about a subsidy scheme is that, at the very time when the industry will be suffering from low prices, the subsidy paid will be at its lowest. That is unavoidable in the nature of the Scheme, but it means that the industry will be short of cash when it may need it most.

Let me add one word about the availability of crews. Questions of Wages and safety and competition from other seafaring industries have always presented difficulties. In my own area we now have the additional problem of oil rigs, making it more difficult to get responsible and good crews for our fishing vessels. I anticipate that, certainly in the port of Lowestoft, we shall have to pay more money to get the right type of man to go into the industry, to train him properly, and keep him afterwards. As I understand it, paragraph 10 will enable the industry to pay the wages commensurate with getting the people required without this affecting the subsidy payment. I hope that the Minister will confirm that that is the case.

We should give a welcome to this Scheme. We all have our reservations on the fishing industry, but we all want to see it contribute more than it has in recent years both to the import-saving rôle that it can have and also to the general prosperity of the country. The fishing industry has many fine people working in it, both on the management side and on the crew side, and we in this House all wish to do what we can to help them.

10.44 a.m.

Mr. Patrick Wolrige-Gordon (Aberdeenshire, East)

The deep sea ports are well represented in the House today, and we have also debated the Scheme in principle, so I, too, will turn my attention to the White Fish and Herring Subsidies (United Kingdom) (Amendment) Scheme, so as to keep my contribution as brief as possible.

When introducing it, the Minister said that it was a minor alteration. I think that that was a bad choice of words, because this is a fairly major development in policy. The effect of the Amendment Scheme is to pay subsidy on the proceeds of industrial fishing for white fish, bringing our policy on industrial fishing for white fish into line with that in respect of industrial fishing for herring and sprats. This is important because, all along, our attitude to industrial fishing has been, to say the least, ambiguous. We have seemed to find it a little distasteful and perhaps not entirely sporting. We have had, and still have, one solid reason for this attitude. It is the fear that, with the vastly improved catching methods now available and the enormous increase in the fishing efforts of other countries, we could eventually fish the sea dry. The vague theory that there will always be fish in the sea could become as obsolete as the theory that the earth is flat.

Some hon. Members are aware that this is a possibility, and place their hopes on the suggestion that the size of the mesh will do the job, and so prevent this happening. I do not put much faith on the size of the mesh. To change the simile, too often mankind has killed the goose that laid the golden eggs, and there is no reason to believe that he will not do it again.

Unless we improve speedily our production of fish in the same way as we have the catching of it, we will face a very serious decline in the raw material of the industry. That is something of which we should always be aware—

Mr. Speaker

Order. I am not questioning anything the hon. Gentleman says about the future of fishing and the drying up of the supply of fish in the sea, but be must keep to the Scheme.

Mr. Wolrige-Gordon

I apologise, Mr. Speaker. I will come at once to the Scheme. Inasmuch as this is a problem with which we can deal, I think that the approach in the Scheme is the right one. The Government have made the right decision, bearing in mind this warning.

The Minister gave two reasons for it: the greatly increased demand for fishmeal and the potentially enormous amount of import saving that could be open to us. There is a lot of money in this process, and, even in the past year, we have seen one or two very unfair situations develop; for example, a constituent of mine fishing for Norway pout, paying levy to the White Fish Authority and receiving no subsidy on his catch, will now find that position put right.

I think that this Scheme is the right approach, and I hope that it will help develop the indigenous fishing resources of Scotland, bearing in mind always the necessity for preserving the stocks.

10.48 a.m.

Mr. Graham Page (Crosby)

Like the hon. Member for Bristol, North-West (Mr. Ellis) and my hon. Friend the Member for Banff (Mr. W. H. K. Baker), I am involved elsewhere in a Standing Committee, and I make my apologies in advance if I have to leave before the end of the debate.

The White Fish and Herring Subsidies (United Kingdom) Scheme, 1968—Statutory Instrument No. 1235 of 1968—set up a Scheme of grants for voyages between 1st August 1968 and 31st July 1969. In the draft Statutory Instrument before us, that is referred to as "the 1968 Scheme".

The White Fish Subsidy (Deep Sea Vessels) (United Kingdom) Scheme 1969 sets up a Scheme for the payment of grants on an added-value basis in respect of voyages between 1st August 1968 and 31st July 1971. That is referred to as "the 1969 Scheme".

The House will see that there is an overlap between these two Schemes of the period from 1st August 1968 to 31st July 1969. During that period, a vessel owner can claim under both Schemes for voyages during the period of the overlap. However, in grants being paid under the 1969 Scheme there will be deducted, first, any payment under the 1968 Scheme and, second, any payment due to the vessel owner under the 1968 Scheme. So the vessel owner will be able to retain what is paid to him under the 1968 Scheme, receive what is due to him under the 1968 Scheme, and then be paid the net amount under the 1969 Scheme. The Parliamentary Secretary nods. I hope I am right on this brief explanation.

It is clear from the evidence given to the Select Committee on Statutory Instruments by officials of the Ministry, but I submit that it is not clear from paragraph 9(3) which, paraphrasing it, states that if grants have been paid under the 1968 Scheme in respect of voyages ending in the overlap period, the total amount of grant"— that phrase is a little ambiguous— shall be the 1969 Scheme, less such amount in respect of the 1968 Scheme grants as the Ministers may determine. On the fact of it, that leaves the Minister an almost completely free hand, but his freedom is a bit fettered in the proviso to sub-paragraph (3), which states that the amount which he is to deduct must not exceed a certain sum. It must not exceed the total of all sums payable"— and I query the word "payable"— by way of 1968 Scheme grants". If the House will bear with me, I should like to put on record a paragraph of the evidence given to the Select Committee on Statutory Instruments because it seems to explain the scheme, and it is an explanation which is not fully carried out in the Order.

The witness said: Under the 1968 Scheme, these voyage payments are payable for the whole of the 12 months from August, 1968, to July, 1969. They are paid to a certain extent in arrears, obviously, and there is a gap between the claims being made and actually paid. In calculating the amount of money due under the 1969 Scheme, and making the deduction in gross of the 1968 Scheme grants, the Minister can only deduct such amounts as he knows to have been paid; in other words, at the moment, under the first payment which it is intended to make, the Minister will be deducting the payments made from August, 1968, to December, 1968, simply because those were all that were identifiable as having been paid at the time the calculations were made. This is the thing which the Minister determines, the amount he can deduct from the first payment. Then the witness went on to describe that much the same procedure would happen on the next payment.

That is not what is said in paragraph 9(3) of the Order by the words … such amount in respect of the 1968 Scheme grants as the Ministers may determine. It would have been so easy, in place of those words, to say, by the amount paid or assessed payable under the 1968 Scheme. It would then have been clear to everybody reading the Scheme exactly what they were to receive.

I should like to make a general comment, if I can relate it clearly to the Order and without in any way presuming to lecture the House. In Orders of this kind the House is frequently disposing of hundreds of millions of pounds of public money. It is, therefore, to say the least, prudent to see that the provisions under which that disposition are made are clear and unambiguous and within the powers granted to the Minister by Parliament. Yet the form and procedure of this legislation by Order is in strong contrast with the procedure which we adopt in producing an Act from a Bill where we go through the Committee and Report stages to see that the wording is satisfactory. The absence of that procedure in such an Order as this is partially replaced by the scrutiny of the Select Committee on Statutory Instruments, and I know that the Parliamentary Secretary treats the results of that scrutiny with respect.

I am sorry that the Parliamentary Secretary could not promise the House an amending Order in this case. I think that it would have put the matter right for those who have to operate it. But the House will be grateful for the assurance which the hon. Gentleman has given. I think that is the next best thing to an amending Order, especially as paragraph 9(3) of the Order will be operative for only a comparatively short time. On that basis, I think the assurance given by the hon. Gentleman, for which I am indeed grateful, is the next best thing to an amending Order.

10.56 a.m.

Mr. Anthony Stodart (Edinburgh, West)

First, I should like to welcome my hon. Friend the Member for Crosby (Mr. Graham Page), who does not usually take part in fishing debates. I thank him for his wise intervention. It is obviously valuable that the Select Committee on Statutory Instruments should be able to keep an eye on the wording of these many Orders, involving, as my hon. Friend said, many millions of pounds.

I am slightly worried at the way that the debate has gone, because it has taken less than an hour so far. It rather adds to my concern about future debates on the deep sea fishing industry, because I can foresee the usual channels probably coming to us and saying that 4 o'clock in the morning is all right for the fishing industry if we take only 40 minutes about it. However, far be it from me to complain about short debates or to quarrel with you, Mr. Speaker, about the virtue of short speeches.

Before coming to what I wish to say about the Scheme, I wonder whether I might ask the Parliamentary Secretary, when he replies, to clear up two oddments.

I refer, first, to the definition of "the Ministers" in paragraph 2 near the top of page 2. The hon. Gentleman will remember that in Committee I sought to move an Amendment, which was ruled out of order but which we discussed on the Question, That the Clause stand part, about why in the Bill there was a reference to the Secretary of State concerned with the fishing industry in Scotland. I asked why we should not call him the Secretary of State for Scotland? Why is there one thing in the Bill and then the words that I want to feature in the Statutory Instruments? Perhaps the hon. Gentleman will give us an explanation.

Secondly, the part of sub-paragraph (2) beginning "gross proceeds" seems perfectly simple. It means, … the gross proceeds from the first hand sale of the fish caught by the vessel on that voyage and so forth.

It then goes on to say, … together with, in any case where during the voyage the vessel was employed for a purpose other than that mentioned in paragraph 3(2)… Paragraph 3(2) states: The voyages to which sub-paragraph (1) of this paragraph relates are voyages made for the purpose of catching white fish… Could the Minister tell us what these other purposes may be?

Having dealt with those two oddments, I turn to paragraph 10 where there is much of the meat of the Scheme. In Committee I was critical to perhaps a limited extent of the method of calculating the added value formula. At that stage I praised this new approach of rewarding efficiency by subsidy and tying subsidies to efficiency. I still think that this is a good principle, but I am not as yet as convinced as I should like to be that with wages excluded—and they are a very large item—the subsidy instrument will be as sharp as it might be. I still feel—and I dealt with this in Committee—that a highly modernised, 100 per cent. labour-saving equipped vessel might not benefit at all from what I believe must be described as its superior efficiency over a much more traditional vessel, because the results of the labour-saving equipment, namely, the saving in wages, are being excluded. However, I accept that there are other factors which have to be put into the scale.

If what I am suggesting were to cause under-manning, which in turn would cause hazards and danger to lives, then I should not advocate it, and I noted the views of the hon. Member for Kingston upon Hull, North (Mr. McNamara) on this in Committee. I think that we must give this new formula a chance to see how it works, and I hope that it will be given a fair wind so that we can get a good idea of what the effects of it will be.

In answer to a Question in the House on 25th of last month the right hon. Gentleman, when announcing the subsidy of £1.2 million for the six months up to 31st January, said that this was just over 15 per cent. of £7.7 million, which is the total added value for all the eligible vessels. Much of paragraph 9 of the Scheme is devoted to saying how the subsidy will work, and how it will be pitched according to the operating profits. I think that it would be more helpful if, instead of being told what the percentage of the added value is—and added value and profit are different things—we were told on what profit figure the sum of £1.2 million is based. I am not seeking information about the profits of individual vessels, but I think it is fair to ask what this 15 per cent. figure is in terms of profits. From the formula, with all its phasings, and so on, I should have expected, if my arithmetic is any good at all, to have found that a subsidy of £1.2 million would be paid on profits of about £5½ million. I do not know whether I am right about that. Perhaps the Minister will confirm it. As this is the basis of it, I think that it would be helpful if, when announcements about it are made, it was linked with the figure of the overall profits.

I turn now to paragraph 4, which deals with the subsidy period. The subsidy period is to be one not exceeding 12 months in duration. Is it the Government's intention to break this period into periods of six months on every occasion? I know that they have done so this time, but is this always going to be done? Will there always be what one might describe as an interim and a final settlement? On Second Reading of the Bill the right hon. Gentleman was not entirely clear about this. He said: We are anxious to begin payments on the new basis as soon as possible. We are proposing, therefore, to do the initial calculations; for a half-year."—[OFFICIAL REPORT, 6th November, 1968; Vol. 772, c. 916.] One could draw from that the inference that, after the initial calculations have been made, the half-year period will not be used and we might revert to an annual settlement. If that were to happen, I think that the industry might run into difficulties.

The hon. Member for Kingston upon Hull, West (Mr. James Johnson) said that this urgent reinforcement was being anxiously awaited. My hon. Friend the Member for Lowestoft (Mr. Prior) referred to the payment that was likely to come in August, when the amount of liquid cash available was likely to be at its lowest, and the subsidy was likely to be smaller. Mr. Speaker, far be it from me to stray a single footstep, but I am sure you will be tolerant if I refer for a moment to agriculture. I have in mind the importance of the monthly milk cheque. At a time when interest rates are extremely high, the frequency with which payments are made in cash can be a matter of great importance to the industry, particularly when one remembers that the payments made under the scheme which has just ended, the daily rates, were paid within a fortnight or so of the voyage coming to an end. This is where there is a slight analogy with the monthly milk cheque. Money came in a little more frequently, and as interest rates are as high as they are, I hope that the Government will watch the situation. I think that a period of six months is the absolute minimum. I do not know whether payments can be made more frequently than that.

We have all welcomed the Scheme. It is an extremely interesting one, in that it breaks entirely new ground. This is a new concept of providing subsidies, and it will be fascinating to see how it works. I agree with the hon. Member for Kingston upon Hull, West when he says that there are still unemployed persons at Hull. We are not yet out of the wood. I also agree with my hon. Friend the Member for Lowestoft, who described this as rather an interim matter. This is not the end of the story.

The difficulties of the fishing industry will not be solved as long as the industry remains a prey to so many imports. It has been pointed out that we spend £30 million on importing fishmeal. We should be conscious of the balance of trade and watch this matter. Imports of frozen fillets were tariffed at 10 per cent. at 6th November last, but I would like to know what effect—

Mr. Speaker

Order. The hon. Gentleman has kept splendidly in order so far. I hope that he will not spoil that good record by straying from order now.

Mr. Stodart

My only comment on the question of imports is that if they are not adequately controlled and if they contrive to bring down the price of fish to the British catcher, the Government will have to act again if they mean this Scheme to be of real benefit.

What I said some time ago in another context applies in this case; that by this Scheme the Government are seeking to give a blood transfusion which, it is hoped, will be of immense benefit to the fishing industry. If the import situation is not dealt with, the Government will, having given that blood transfusion, be cutting the person's throat and letting the blood run out at the other end.

I hope that, although this Instrument will run for three years, discussion and debate will not be stifled and that we will have opportunities to debate this important import-saving sector of British industry.

11.12 a.m.

Mr. Hoy

I am grateful to hon. Members on both sides for the way in which they have received the Scheme. I will not attempt to draw analogies. I have already been reminded this morning about fish being like geese which lay golden eggs, and in his remarks the hon. Member for Edinburgh, West (Mr. Stodart) talked of the danger of cutting somebody's throat and letting the blood run out at the other end. I do not know what sort of surgery he had in mind, and it is probably best that I come to the facts and leave the analogies to others.

I agree with the point made by several hon. Members, including the hon. Member for Lowestoft (Mr. Prior) that every time we introduce a new Instrument or Scheme for the fishing industry we say that it is likely to be the last. We can only hope for the best. As he said, this is probably the best Scheme to have been made for a long time. I hope that, in practice, it will be the answer to the problem. Only as a result of the operation of the Scheme will we be able to tell if it can perform the job which it is designed to do.

To answer the specific point raised by the hon. Member for Edinburgh, West, the payments in this case will be on a six-monthly basis. Just as the farmer likes his monthly milk cheque, so we cannot keep the fishing industry waiting. There may perhaps be alternations of provisional and final payments, but I assure hon. Members that the payments will be made at six-monthly intervals.

Reference was made to the Preamble to the Scheme, which refers to the Minister …concerned with the sea fishing industry in Scotland).… This is in line with the Sea Fisheries Act, 1968, and identifies the Secretary of State for Scotland as …(being the Secretary of State concerned with the sea fishing industry in Scotland)… at the time. It does no more than that and I hope that the clarity of that reply answers the question.

I was asked what other purposes we might have had in mind, in addition to fishing, from the point of view of the Scheme. I remind the House that there may be charter voyages and voyages undertaken for salvage purposes. The definition is designed to cover matters such as this only partially, remembering that there may be a loss of fishing time for other reasons.

The hon. Member for Bristol, North-East (Mr. Ellis) wondered about the costs involved. I thought that much of what he said might have been mentioned in a different debate; perhaps one concerned with shipbuilding grants and loans. I assure him that all operating costs in this matter, except labour and training, are treated in the same way, mainly because it would not have been appropriate to have made too many exceptions. The idea is that efficiency should be the yardstick. If this is to be the case, the matter must be considered as a whole, because every sort of cost can be regarded as special by vessel owners.

As the hon. Member for Edinburgh, West admitted, the question of safety is an important factor, particularly when at sea. We dare not risk being accused of so minimising on the cost of labour that we might endanger the safety of vessels.

The hon. Member for Edinburgh, West also made the point that we were not taking as long over debating this matter as we might have done. I suggest that as we are introducing a Scheme and are taking other measures to ensure the efficiency of the fishing industry, it is as well for us to show efficiency in our debate. We should show that we are not wasting the time of Parliament but, instead, are using it to the best of our ability in discussing the problems of the industry.

The inshore fishing fleet will be dealt with annually and the relevant Instruments will apply to that section of the industry alone. We could not alter this Scheme to take that into account. We are here giving long-term security. We do not want to be rehashing the Scheme every year or so and perhaps thereby removing that element of security. I am sure that time will be found for the necessary debates to take place at regular intervals.

Several hon. Members raised the question of industrial fishing. It is worth mentioning that this type of fishing has gone on in this country for a considerable time. It is true that, apart from herrings, those concerned have not been paid—those catching other white fish-but I am glad that this Scheme has been welcomed, although the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) delivered a warning like the wrath of God. I was not sure whether he was supporting or opposing the Scheme, but I take it that it has his support and that he agrees that these payments should be made.

The subject of how we should protect the fishing fleet received a good deal of attention, and a number of hon. Members called for greater fishery protection. The fishery protection squadron and cruiser service patrol the fishery limits and perform a great service to the fishing industry within the resources available. We are always endeavouring to improve this service and I assure hon. Members that their comments have been noted.

It should be remembered that one cannot urge the fishery protection vessels to do their job efficiently and then complain that they are doing it too well. I appreciate what has been said about the need for those fishing not to be interfered with. However, we gave certain tasks, such as inspecting net mesh sizes, to our protection vessels and we should enable them to perform those tasks.

The industry has questioned the value of industrial fishing. It is not so many years ago that the industry raised the point which the hon. Member for Ross and Cromarty (Mr. Alasdair MacKenzie) raised this morning, whether we would take out of the sea the very small fish which make for good fishing later, thereby doing great harm to the industry. The industry has reached the conclusion that this is not so. We will take every possible measure to safeguard the position.

The hon. Gentleman referred to the possible effect that a subsidy on industrial fishing might have on conservation. We and other countries fishing in the North-East Atlantic are parties to agreements on minimum mesh sizes. There is a provision allowing under-sized fish of protected species to be landed within the limit of 10 per cent. of an industrial catch. It is not permissible to land undersized fish for human consumption, nor as part of a catch for human consumption. These are fairly extensive safeguards.

The question of imports was raised. Mr. Speaker ruled that question out of order. What we were discussing at Geneva was the 10 per cent. tariff that we imposed. The British Press referred to it in a strange way; it reported it as a breakdown in the talks. All that happened was that we decided to keep the 10 per cent. on. We will go on to the end of the year. I cannot say what real effect it has; the months during which it has operated are not the important ones and are not a sufficient guide. We have agreed to keep the 10 per cent. on.

Mr. Wall

I am grateful to the Joint Parliamentary Secretary for that explanation. What has happened about the Annex to the Stockholm Agreement, which, I gather, has to be renegotiated, or at any rate discussed, before 1970? Was it discussed at the meeting to which the hon. Gentleman referred?

Mr. Hoy

I am being tempted to go too far. I see, Mr. Deputy Speaker, that you are about to rise. May I respond in one sentence and say that this must be renegotiated before the end of this year. I will not stray outside the rules of order any longer.

My hon. Friend the Member for Bristol, North-West asked a question about the disclosure of profits. I agree that the giving of a subsidy calls for a measure of public accountability, but I do not think that it would be right to give the return of individual owners. We do not do it with any other industry. There would be a danger, when we got it down to certain areas, that we would be very near to disclosing what certain people were getting. We will see what we can do in a general way, but I cannot go beyond that promise at this time.

Mr. Stodart

The hon. Gentleman has not dealt with my point on this subject. I subscribe to the view that individual profits should not be disclosed, but will he confirm the figure that I suggested for the overall profits on which the payment is being based? That is a figure which the House is entitled to have.

Mr. Hoy

I could not work out the figures whilst sitting on the Front Bench, so I cannot confirm it now. I will make inquiries and write to the hon. Gentleman. I think that I have replied to all the points raised, except the one that the hon. Member for Haltemprice is about to remind me of.

Mr. Wall

The hon. Member for Kingston upon Hull, West (Mr. James Johnson) and I asked when it is expected that the report of the I.R.C. on the reorganisation will be received.

Mr. Hoy

I thought that it must be a point which was half-way to being out of order. Considerable progress has been made. I hope that within days a statement will be made. I do not want the hon. Gentleman to hold me to four or five days, but I hope that we shall have an answer within seven to 10 days.

Question put and agreed to.

Resolved, That the White Fish and Herring Subsidies (United Kingdom) (Amendment) Scheme 1969, dated 17th February 1969, a copy of which was laid before this House on 25th February, be approved.

White Fish Subsidy (Deep Sea Vessels) (United Kingdom) Scheme 1969, dated 17th February, 1969 [copy laid before the House 25th February], approved.—[Mr. Hoy.]